From 15.5 per cent in 2021, India’s mall vacancy rates declined to 8.3 per cent in H1, FY25, according to a report by Anarock. This decline highlights the growing demand for retail spaces, which has consistently outpaced supply for the third consecutive year. In H1, 2024, over 3.1 million square feet of retail space was leased across the country.
Anuj Kejriwal, CEO and MD – Retail, Industrial & Logistics, Anarock Group, highlights, retailers and brands continue to prefer smaller spaces, with nearly 70 per cent of leases being for spaces measuring up to 2,500 sq ft, he says. However, as new supply enters the market in the coming years, larger spaces are expected to account for a greater share of the total leased area, he notes.
The next few years are set to see substantial supply additions, with the National Capital Region (NCR), Mumbai Metropolitan Region (MMR), and Hyderabad leading the charge. These three regions are projected to account for over 85 per cent of the total incoming supply over the next four to five years.
While the leasing momentum remains robust, rental values across prominent high streets are climbing steadily. The upward trend is expected to persist until fresh, quality retail supply enters the market.
The leasing activity in H1 FY25 mirrored the robust momentum of the past two years, with over 3 million sq ft of retail space leased across major cities. As demand continues to thrive, the retail sector remains poised for steady growth, driven by both increasing retailer interest and new supply pipelines in key markets.
